Why Jensen’s downfall puts SEA at risk

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Jensen Huang was supposed to be in Asia next week. Donald Trump is heading to the Philippines for the APEC Summit, then to China for the APEC Leaders’ Meeting, and Nvidia’s now-former CEO was expected to be by his side to sell chips to Asian companies.

Instead, Jensen now finds himself engulfed in a scandal few could have imagined. Two alleged affairs have come to light in the span of a week. He has admitted to one, involving Alice Huang, an alleged Chinese spy. The other reportedly involves Kimberly Powell, an Nvidia vice president who reports directly to him.

Image credit: Made by Ulla/Tech in Asia with the help of AI

On Thursday, the company announced his resignation, with CFO Colette Kress taking over as interim CEO.

Interestingly, many people in the AI industry aren’t surprised by the allegation that Megaspeed, the Singapore company where Alice was an executive, routed Nvidia chips to Chinese firms barred by the US from buying them. Following the scandal, a fifth person has been hauled to court in Singapore, accused of trading Nvidia chips without authorization.

Chip diversion has apparently been an open secret in the industry.

“It’s actually nothing new,” says Manoj Sukumaran, an independent analyst who covers the AI and chip industry. “People knew it since, I would say, the past one year or eight months.”

Donald Trump’s administration has largely turned a blind eye to this alleged chip diversion, helped in part by his close relationship with Jensen. Nvidia’s status as the world’s most valuable company and its considerable influence in Washington have been unprecedented.

This week, the New York Times reported that Nvidia got a US probe into Megaspeed halted. This episode alone shows how much influence Nvidia has on both Washington and the AI industry.

As the industry’s de facto central bank, Nvidia bankrolls companies struggling to raise funding elsewhere, helping keep the bubble inflated. But as the internet loves to joke, nobody expected Jensen to puncture it with something he should have kept in his pants.

Still, people in Asia’s AI computing industry have told us it’s business as usual. Nvidia’s chips remain too important for customers to abandon over a scandal involving its former CEO.

Bruce Yang, co-founder and CEO of Singapore-based model maker Sapiens AI, says Nvidia will remain the default choice for both training and inference at his company. He points to the “stronger ecosystem” around CUDA – Nvidia’s software platform for running computations on its GPUs – and notes that training and inference are “better optimized” on Nvidia chips.

Switching to a different chip architecture would mean redoing much of the company’s existing work, he adds.